San Paolo IMI CIO joins e7.5bn foundation

ITALY – Davide Tinelli, formerly chief investment officer at Milan based San Paolo Imi Institutional Asset Management, has taken up the position of chief financial officer at the e7.5bn foundation Compagnia di San Paolo.

According to Tinelli, there is a growing trend in Italy for professionals from the asset management industry to move towards financial investment, and his appointment was also part of a “natural” flow. “The trend is in the direction of larger attention to professional skills and background in people hired to the financial side of institutional investors,” says Tinelli.

The foundation is also currently short-listing investment managers for fixed income mandates worth e2bn in total. The briefs will focus on EMU government bonds. The process, advised by Cambridge Associates, should be completed in June. Compagnia di San Paolo is already 55% invested in equities but the bulk of it is in San Paolo Imi bank, a legacy of the privatisation of publicly owned banks.

The Italian foundations have major investments in the privatised banks, but in order to diversify the foundations’ assets the national government is working on reducing their stakes in the banks.

The Italian treasury is also going to publish new concrete accounting rules for foundations, says Tinelli. In the future, according to the plans, the foundations will only have to take into account the dividend volatility of the banks, in which they have a major share.

Italian foundations are big players in the country’s institutional investment markets at a time when the new pension funds are still fairly small internationally. “For the time being foundations are bigger investors than pension funds in Italy. They have had success but they need time to grow, so in ten years pension funds will be bigger than foundations. But for the next five years, we will have much more money,” says Tinelli.

Compagnia di San Paolo, originally founded in 1563, is a charity, which over the century has become one of the biggest Italian banks. The privatisation process has made a de facto split of the bank by re-establishing the charity and separating it from the banking business. Among other causes, it grants money to education, culture and healthcare.